Colleague Paul Fakler stopped by on his way to the coffee machine to advise that webcasting as we know it may soon be over. Forced by me to expand, Paul advises:
“Although the public version of the decision has not yet been released pending various redactions of sensitive financial information, the newly-formed Copyright Royalty Board has issued its decision setting new rates and terms for webcasters and certain other digital audio services. The news is not good for webcasters. The RIAA and its affiliate SoundExchange have a long history of proposing wildly high royalty rates for the various compulsory licenses provided by the Copyright Act (except, of course, when they are the licensees, e.g., mechanical licenses from song composers). In every prior proceeding, the arbitration panels have rejected that proposal and crafted a rate somewhere between the RIAA proposal and the licensees’ proposals. Until now. In the previous rate setting proceeding (instituted in 2000 with rates set in 2002), RIAA requested a per-play rate of .4 cent for webcasters. The Copyright Arbitration Royalty Board (CARP, under the old system) initially set a rate of .14 cent per play, which was lowered further on appeal to .07 cent. In 2004, the first time the rates were up for reconsideration, the RIAA and webcasters agreed to extend this per-play rate. The parties could not settle when the rates recently came up for reconsideration again, and an rate proceeding commenced. According to the RAIN newsletter the Copyright Royalty Board issued its decision last Friday, and for the first time adopted the record labels’ full proposed per-play rate of .19 cent (phased in from .08 cent from 2006 through 2010). According to the analysis on RAIN, even the retroactively effective rate for 2006, .08 cents per play, works out to over 100% of a typical webcaster’s revenue. It boggles the mind how a supposedly market-rate determination by the Copyright Royalty Board could end up with such a rate that no sane webcaster ever could have agreed to.”
This is a shame. I was hoping that Bose or Tivoli would invent a table radio with WiFi, that would receive every radio station in the world.
Disclosure: Paul represents a client in a proceeding against Sound Exchange.
Other coverage: TechDirt: “RIAA Pushes Through Internet Radio Royalty Rates Designed To Kill Webcasts.